INVITE-ONLY SCRIPT
RT-Mayer Multiple
The Mayer Multiple is a simple metric used to gauge whether Bitcoin is overvalued, undervalued, or fairly priced compared to its long term historical trend.
Introduction
The Mayer Multiple is a straightforward yet powerful tool designed to help Bitcoin traders and investors quickly assess the asset’s price in relation to its long term trend. Developed and popularized by investor Trace Mayer, this metric compares Bitcoin’s current price to its 200 day moving average (200DMA) - a widely respected benchmark for identifying the prevailing market direction.
By expressing this relationship as a single number, the Mayer Multiple makes it easier to see whether Bitcoin is trading at a historically high, low, or more neutral level. Over the years, this simple ratio has gained a reputation for highlighting potential accumulation zones during market downturns, as well as signaling overheated conditions during strong rallies. While it is not a crystal ball, the Mayer Multiple offers useful context that can help traders align their strategies with the broader market cycle and reduce emotional decision making in volatile conditions.
This tool takes the base Mayer Multiple and visualizes it, rather than only showing a single number. By turning the data into a chart, traders can more easily see where Bitcoin may be approaching potential topping or bottoming zones within the traditional four year cycle.
Behind The Math
The Mayer Multiple is calculated as:
Mayer Multiple = Current Bitcoin Price / 200 day moving average of Bitcoin
In this implementation, the resulting values are then mapped into a set of “SD style” bands that typically range from around 0.4 to 8.3 on the chart. These zones are used to highlight when price is trading well below, near, or far above its long term trend. Many traders follow these levels to help frame when they might want to focus more on accumulating versus taking profits.
Points of Interest
Accumulation
Historically, periods where the Mayer style reading is below roughly 0.9 have often aligned with deeper drawdowns and potential long term accumulation zones:
Distribution
Similarly, readings above roughly 2.0 have often coincided with distribution or profit taking areas, where price is extended well above its long term average:
The 2.4 Rule
During the original exploration of the Mayer Multiple, backtests suggested that buying when the reading was above roughly 2.4 frequently led to weaker risk adjusted returns. In other words, historically, buying in that zone often meant entering late in a cycle rather than near the beginning of a major advance.
This 2.4 style level is highlighted on this chart as a caution zone:
A few reasons why traders pay attention to this area:
Historical Patterns:
Many of Bitcoin’s more extreme speculative peaks - such as late 2013, late 2017, and early 2021 - occurred when the Mayer Multiple pushed well above the 2.4 region.
Overheated Zone:
A Mayer Multiple above 2.4 means Bitcoin is trading at more than 240% of its 200 day moving average. That is a strong sign that price has moved far ahead of its long term trend and may be driven by hype, FOMO, and speculative buying.
Mean Reversion Risk:
Historically, when BTC has traded that far above its long term average, it has eventually reverted back toward (or below) the 200DMA, often with sharp drawdowns in the 30% to 80% range.
Risk / Reward Considerations:
Above this region, the probability of further short term upside has often been smaller compared to the risk of a major correction. Many longer term participants treat it as an area to be cautious and to focus on risk management rather than aggressive new accumulation.
As always, this indicator should not be used in isolation. It is best applied as one component in a broader framework that includes your own analysis, risk management, and time horizon. Historical tendencies do not guarantee future results.
If you have any questions, feel free to leave a comment.
🐋 Tight lines and happy trading!
Introduction
The Mayer Multiple is a straightforward yet powerful tool designed to help Bitcoin traders and investors quickly assess the asset’s price in relation to its long term trend. Developed and popularized by investor Trace Mayer, this metric compares Bitcoin’s current price to its 200 day moving average (200DMA) - a widely respected benchmark for identifying the prevailing market direction.
By expressing this relationship as a single number, the Mayer Multiple makes it easier to see whether Bitcoin is trading at a historically high, low, or more neutral level. Over the years, this simple ratio has gained a reputation for highlighting potential accumulation zones during market downturns, as well as signaling overheated conditions during strong rallies. While it is not a crystal ball, the Mayer Multiple offers useful context that can help traders align their strategies with the broader market cycle and reduce emotional decision making in volatile conditions.
This tool takes the base Mayer Multiple and visualizes it, rather than only showing a single number. By turning the data into a chart, traders can more easily see where Bitcoin may be approaching potential topping or bottoming zones within the traditional four year cycle.
Behind The Math
The Mayer Multiple is calculated as:
Mayer Multiple = Current Bitcoin Price / 200 day moving average of Bitcoin
In this implementation, the resulting values are then mapped into a set of “SD style” bands that typically range from around 0.4 to 8.3 on the chart. These zones are used to highlight when price is trading well below, near, or far above its long term trend. Many traders follow these levels to help frame when they might want to focus more on accumulating versus taking profits.
Points of Interest
Accumulation
Historically, periods where the Mayer style reading is below roughly 0.9 have often aligned with deeper drawdowns and potential long term accumulation zones:
Distribution
Similarly, readings above roughly 2.0 have often coincided with distribution or profit taking areas, where price is extended well above its long term average:
The 2.4 Rule
During the original exploration of the Mayer Multiple, backtests suggested that buying when the reading was above roughly 2.4 frequently led to weaker risk adjusted returns. In other words, historically, buying in that zone often meant entering late in a cycle rather than near the beginning of a major advance.
This 2.4 style level is highlighted on this chart as a caution zone:
A few reasons why traders pay attention to this area:
Historical Patterns:
Many of Bitcoin’s more extreme speculative peaks - such as late 2013, late 2017, and early 2021 - occurred when the Mayer Multiple pushed well above the 2.4 region.
Overheated Zone:
A Mayer Multiple above 2.4 means Bitcoin is trading at more than 240% of its 200 day moving average. That is a strong sign that price has moved far ahead of its long term trend and may be driven by hype, FOMO, and speculative buying.
Mean Reversion Risk:
Historically, when BTC has traded that far above its long term average, it has eventually reverted back toward (or below) the 200DMA, often with sharp drawdowns in the 30% to 80% range.
Risk / Reward Considerations:
Above this region, the probability of further short term upside has often been smaller compared to the risk of a major correction. Many longer term participants treat it as an area to be cautious and to focus on risk management rather than aggressive new accumulation.
As always, this indicator should not be used in isolation. It is best applied as one component in a broader framework that includes your own analysis, risk management, and time horizon. Historical tendencies do not guarantee future results.
If you have any questions, feel free to leave a comment.
🐋 Tight lines and happy trading!
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Only users approved by the author can access this script. You'll need to request and get permission to use it. This is typically granted after payment. For more details, follow the author's instructions below or contact RainbowRunner144 directly.
TradingView does NOT recommend paying for or using a script unless you fully trust its author and understand how it works. You may also find free, open-source alternatives in our community scripts.
作者的说明
Once your subscription is active, you will find the script under Indicators → Invite only scripts in your TradingView account. For questions about how it works, please refer to the description page and leave a comment if you have any questions.
免责声明
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
仅限邀请脚本
Only users approved by the author can access this script. You'll need to request and get permission to use it. This is typically granted after payment. For more details, follow the author's instructions below or contact RainbowRunner144 directly.
TradingView does NOT recommend paying for or using a script unless you fully trust its author and understand how it works. You may also find free, open-source alternatives in our community scripts.
作者的说明
Once your subscription is active, you will find the script under Indicators → Invite only scripts in your TradingView account. For questions about how it works, please refer to the description page and leave a comment if you have any questions.
免责声明
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.